Barclays raises cap on bonus and commission income for mortgage affordability

Barclays has announced changes to its mortgage affordability calculations, increasing the amount of regular bonus, overtime, and commission income it considers. Previously, these forms of income were capped at a total equal to the customer’s basic salary plus allowances. Under the new approach, Barclays will now include bonus, overtime, and commission income up to four times the basic salary plus allowances.

For example, someone in a commission-heavy role earning a basic salary of £30,000 per year but £120,000 in commission would previously have been considered to have a total income of £60,000. With the new changes, up to £150,000 could now be counted.

This update follows other recent enhancements to affordability calculations at Barclays, including adjustments for the self-employed, interest-only borrowers, and buy-to-let customers.

Lee Chiswell (pictured), head of mortgages at Barclays, said: “We know that affordability is probably the greatest barrier for most consumers who want to buy a home. We’ve taken a long look at how we can support customers, particularly first-time buyers, and as a result have made several tweaks to our lending criteria."

"Taken together, these will make all the difference for a range of people with different income types, getting people into homes that would previously have been out of reach.”